Reducing waste in production Traditionally, many materials used in the production of devices are made using industry-standard computer numerical control (CNC) manufacturing. With CNC, the shape of the product component is cut out of a large block of raw materials after which the excess is discarded. To reduce waste in production, we have started to introduce material “stamping” techniques in our manufacturing which instead mold the raw materials to the desired end shape. For our new Surface Laptop Studio, stamping reduced our manufacturing aluminum scrap rate for the product’s base by at least 25 percent. Enabling repair Repairability and serviceability can extend the lifespan of our devices. In 2021, our Design for Repair engineering program helped launch the Surface Pro 8, the Surface Laptop Studio, and Surface Laptop SE, which are considered to be some of the most repairable devices in their product lines with replaceable displays, batteries, keyboards, and more. We have also established a growing Authorized Service Provider (ASP) network to expand customer repairs across countries including the United States, Canada, Australia, Germany, and France. We recently partnered with iFixit to offer service tools for Surface devices to iFixit Pro independent repairers, Microsoft Authorized Service Providers, Microsoft Experience Centers, and Microsoft Commercial customers which can be purchased directly from iFixit. Our goal is to continue to expand safe, secure, and sustainable repair options for our Surface and Xbox devices. Microsoft has also committed to hiring an independent consultant to conduct a study on the sustainability benefits of repairable Surface and Xbox devices, including impacts on carbon emissions and waste. Microsoft will publicly post a summary of our findings on our website by May 2022. Designing for recyclability Sustainable packaging As we make progress on our 100 percent recyclable packaging goal for all devices by 2030, our Ocean Plastic Mouse and new Surface Slim Pen, available in 2021, are the first of our products to ship in 100 percent recyclable and plastic-free packaging. The Ocean Plastic Mouse packaging is comprised of 20 percent wood fiber, which is sustainably forested, and 80 percent Bagasse fiber, a fast- growing and highly regenerative bio-renewable material. The packaging for our holiday 2021 Surface products— such as Surface Duo 2 and Surface Pro 8—are 99 percent recyclable on average. And, starting with our Surface Laptop 4 packaging launched in April 2021, all of our new packaging is made with 100 percent sustainably forested content as certified by the Forest Stewardship Council (FSC). We also eliminated a single-use plastic product, converting our Xbox gift cards from plastic to paperboard, reducing over 500,000 kg of plastic annually. Recyclable devices Driven in large part by both materials selection and designing for disassembly—a natural byproduct of designing for repair—we produced a Surface Laptop 4 (metal version) that is 93 percent recyclable in OECD countries by UL standard ECVP 2789. Our Xbox Series X and S were also found to be 97 percent recyclable as a part of Microsoft expanding its recyclability commitment to also include Xbox and Xbox accessories. Complex flame retardants, additives, and polymer grades used in consumer electronics make recycling of many plastics at end-of-life difficult. Microsoft is collaborating with suppliers in the industry to explore a closed loop supply chain for these difficult-to-recycle materials. Using end-of- life plastic material from Xbox consoles, PC accessories, and more, we’ve created a new closed-loop recycled resin that is being evaluated for use in upcoming products. Responsible end-of-life We have focused on enabling responsible end- of-life with o ur devices, processes, and materials. To ensure products are kept in use longer, Microsoft and our partners work to repurpose or recycle used devices through several programs while encouraging consumers to engage with recycling programs in their own communities. Examples include Microsoft’s Devices Trade-In Program , our Microsoft Authorized Refurbisher Program (MAR) , and our voluntary mailback recycling program . 100% Packaging for Ocean Plastic Mouse and Surface Slim Pen are 100 percent recyclable. 500,000 kg We eliminated a single-use plastic product, reducing over 500,000 kg of plastic annually. 75% of all Xbox Design Lab controllers now utilize post-consumer recycled plastic. Getting to zero waste (continued) 68